Toronto! Where is the Supply of Houses and Condos?
The beginning of the year has been very interesting from a supply and demand perspective. There just haven’t been a significant amount of condos and houses for sale.
Blog, Real Estate
Blog
Blog
How can you rent your rental property faster?
I work with rentals on behalf of clients and for my own properties and the one thing I have learned is that pictures are critical. I repeat pictures are incredibly important. With more and more rentals available and with many people moving into Toronto for school and career shifts, I’m noticing a greater number of renters, renting places sight unseen because they live in other cities. If you are renting a place sight unseen, the most important thing for you is great pictures. It also improves your chances of having your place rented given the competition. When I have a new condo for rent, I hire a stager who will make the place look amazing. I know that it’s common to have condos and houses staged for sale so it’s a little uncommon to have a condo staged for a rental. Although the cost to stage the condo could be $1,500-$2,000 which is usually around the same cost as 1 month’s rent, I still feel that it is a worthwhile investment for the long-term real estate investor. Every time a tenant leaves, you will need pictures. Tenants don’t always keep their places in the best condition. In addition, many tenants don’t want their belongings photographed. The best solution is to stage your rental and hire a professional photographer to take pictures. This way, prospective tenants have a great example to see. More renters will most likely come to see your place because of it. And when an out of town renter is looking for a home, they will most likely select your place because you have put your best foot forward. Your place will look amazing. An initial $2,000 investment can become the gift that keeps on giving for the years to come each time you need a new tenant. Do this once and then you don’t have to do it again. Pictures in this digital world are simply uber important. People are moving at a faster pace and need a quicker way to select your place over the completion. So make your rental stand out. Stage your place. Take great quality professional pictures.
Blog
13 Things You Need To Know Before You Buy A Midtown Toronto Condo
Does size matter? When buying a condo you need to determine what size space you’d like to live in. The older condo buildings tend to have much larger units available than the newer buildings. The average size condo in a newer (less than 5 years old) building is less than 600 sq ft. If you want space you need to look at an older building. BOTTOM LINE: If you want more square footage, go for an older building Maybe size does matter Many buyers like the idea of living in a smaller boutique condo building. However in a smaller boutique condo building, there are fewer units to spread the costs around. Generally the size of the roof is relatively similar from building to building. So if you live in a taller building with more units, you simply have more people to share the cost of replacing it. The same goes for many of the other costs of running a condo building so the more units in a building, the lower the maintenance fees can be. Some people do like having a 24/7 concierge, or a swimming pool, however both will drastically increase the costs of running the building. BOTTOM LINE: If you want lower maintenance fees, pick a large building with many units without a concierge or pool. Would you like a room with a view? The views in our city are literally changing daily and just when you think the view out of your window is secure, BAM!, a new condo building is going up. So if the view is uber important to you, the only thing you can do is to purchase a condo where the view is currently of a park or cemetery. The Mt. Pleasant Cemetery and June Rowlands Park at Davisvillle & Mt Pleasant come to mind. They will never (at least one would hope) build condos over a park or cemetery. When you’re looking for a condo, look out the window and what do you see: A parking lot? That will probably be a condo in the near future. A string of 5-10 houses? That could become a condo in 5-10 years. A small apartment building of less than 8 storeys? It could become a condo in 10 or 15 years. In New York City, when condo developers started running out of land, they started buying up apartment buildings and giving the tenants thousands of dollars as payouts to move. In the years to come, this will start to happen in Toronto. BOTTOM LINE: Remember only parks & cemeteries are safe (we hope!) if you want a room with a view. Why should you care about a status certificate? The status certificate will showcase a building’s financial health. It’s comprised of all the financial statements for the condo corporation. When you are purchasing a condo, the status certificate is sometimes made available to you up front or when you have an accepted offer on the condo. It will be conditional on your lawyer having the opportunity to review the status certificate. The status certificate will also allow you to see how much money the condo corporation has in its Reserve Fund. Every 3 years, every condo corporation must hire an engineering firm to come up with pricing scenarios as to how much it will cost to repair the mechanicals of the building, the roofing and other areas of the building over the next few years. In this Reserve Fund study, the engineers will determine how much money the condo corporation needs to set aside over the years for these repairs. Why does this matter to you? If there isn’t enough money in the reserve fund, the condo board will most likely have to ask all of the owners to pay a special assessment to bring the reserve fund up to where it should be. Does the building have a special assessment coming? A special assessment occurs when the condo corporation realizes there isn’t enough money in the budget or reserve fund to cover a major expense like fixing plumbing, the parking garage, elevator, roof or anything else. It’s when the board and property manager have that “Oh crap” moment that they can’t afford something major that needs to get done. They divide the costs between all of the owners so that each owner will pay an amount in proportion to the size of their unit. No one likes to be charged thousands of dollars they haven’t budgeted for. This special assessment will need to be paid by the seller of a condo before they leave the building or by a new buyer coming in. And don’t think you can get away without paying this if you own a unit in the building. Your condo corporation has more pull in making you pay for outstanding bills than your bank does on making you pay your mortgage. BOTTOM LINE: Be cautious if there is a special assessment on the condo. What can you do to save money on your condo purchase? Purchase an older condo that needs work and isn’t updated and do the renovations yourself. That is of course easier said than done. Doing renovations in a condo means that you’ll have to allow for additional time to have those plans approved by the condo board and property manager. When you make changes to the flooring in a condo, it can affect the suites below so it’s important to abide by the rules set in place to make sure the noise transfer will be minimal for your neighbour. Why you need to see the parking spot before you buy a condo? It makes sense that if you really like the condo to go and see the parking spot too. You need to make sure that it provides easy access for your car to get in and out. You can also assess if the spot is well-lit and how close it is to the door. Do the appliances really work? When you
Blog
How the new mortgage rules are changing the market?
On October 3, 2016, the Federal Government announced a few changes to mortgage rules As of October 17th, if you are putting a down payment of less than 20%, they will give you a “stress test” to make sure that you can qualify for the mortgage based on 5-year Bank of Canada rate. The Bank of Canada rate is currently 4.64% and a competitive rate at one of the major banks would be 2.39%. Based on the new “stress test”, you will only qualify for the mortgage as long as you have a minimum credit score of 600 and if no more than 39% of your household income goes toward your mortgage, heat, or property taxes. The net result could be that you now qualify for 20% less than you would have qualified for in the past. If you are coming up for a mortgage renewal with the same lender, you should be fine however if you move to a new lender, you would have to requalify under the new rules. If you have over 20% to put down on a home, the big banks are contemplating more changes after Nov. 30th so stay tuned. The government has now made it harder for first-time buyers to buy a home. It has reduced their spending power. If a first-time home buyer was once considering a house in the city, their only option, now that the new rules have come into play is a condo, given the price of houses in the city right now. I do believe that this regulation will force more buyers into the condo market. This is great if you own a condo that you’d like to sell. Not so great if you have dreamed of owning a house. So what do I recommend, if you are or will be a first-time buyer with less than 20% down payment? Step 1) Go to www.equifax.ca, pull your credit report. Make sure your score is higher than 600. Step 2) If you’d like to learn more on how to improve your score and make sure your score stays above 600, then listen to my MORRISON REPORT PODCAST with Mortgage Broker, Joe Sammut where we discuss what goes into your credit score and what you can do to improve it. Visit www.morrisontalksrealestate.com and listen.
Blog
How to buy a home in a scarce marketplace?
The Toronto real estate market right has become incredibly competitive due to the lack of condo and house listings. Because the majority of condos don’t have offer dates, it means getting clients into great condos within the first couple of days of the suite hitting the market is critical. A few weeks ago I made an offer on behalf of a client for a condo townhouse in the Yonge & Eglinton area. The townhouse came on the market on Friday. I showed it to my client Saturday. Sunday we put in our offer. By Sunday night, there were now 4 offers on this unit and unfortunately we lost out. In the housing market, even though there are offer dates, I encourage clients to skip the queue and make a bully or pre-emptive offer long before offer night. I recently helped my clients purchase a great home on in the Yonge & Lawrence area using this tactic. I spend a lot of time looking for new listings in the areas my clients are searching, and on Monday around 3pm, I noticed what I felt could be the perfect home for them. The husband was available to see the home at 4pm. After our showing, he decided he loved it and his wife needed to see it, so at 5:30pm his wife came in to see the home and she loved it too. While at the house, I noticed that only the business cards of my colleague & me were present, so it would be a great opportunity to present a bully offer as we were the only ones who had seen the house. I mentioned to my clients that people on property match (daily listings clients receive from their agents) or using realtor.ca would see this house the next day on Tuesday so they wouldn’t have a chance to react. In addition, it was the first day back to school from March Break so people wouldn’t be as focused on their house hunting right now. We put in our offer that night and Tuesday afternoon, my clients had an accepted offer and a new home. They were thrilled. Their home search had finally come to an end in the perfect neighbourhood. I worked with another couple looking for a large downtown condo. The perfect 1300+ sq ft condo with 2 +1 beds and 2.5 bathrooms overlooking Roy Thompson Hall came on the market. We went to see the condo on its second day on the market and made an offer the next day. My clients finally had the place of their dreams and the listing agent informed me that she was receiving many calls from other agents whose clients were upset she sold it so quickly to my clients. As I always say, the early bird gets the worm and that seems to really be playing out in the 2016 real estate market, where buyers and their agents need to be really aggressive with what they want in order to buy the place of their dreams. Toronto has become like New York: if you want it, someone else does too and your only advantage is to beat them to it.
Blog
How To Find A Great Tenant?
I’m often asked what are the best ways to find a good tenant. It’s important to get a quality tenant right from the beginning. Attracting a good tenant means having a quality place to rent out. First and foremost, make sure you have pictures. Then make sure the pictures offer a fair representation of what the house or apartment looks like. Write up a great description then post the pics & other details on various websites. Padmapper.com, Kijiji.ca & Viewit.ca are great places to start. Padmapper.com is a free rental posting site which will aggregate all of the postings on MLS, and other sites so that you can see what other landlords are charging in the area. Although Kijiji.ca is free, I would highly recommend paying for more guaranteed exposure on their site, like on the top of the page. Viewit.ca will also cost money. I have found the best success using padmapper.com & kijiji.ca. Increase your exposure by posting your kijiji link to your Facebook profile in case any friends or friends of friends are looking for a place to live. Once you have your listing posted and you start to receive inquiries, it’s time to use the powers of Google to search each prospective tenant to make sure they are on the up and up. Google them so that you can peruse their Facebook and Linkedin profiles to determine if you have any mutual contacts. If you do, it can be a great opportunity to get an authentic reference. Once they have decided to rent your place, make sure they fill out a rental application so that you can call their references, employer & previous landlords. It’s important to invest the time before someone moves in to make sure they are a respectable person. Unfortunately the Landlord Tenant Board only favours the tenant so once someone is in, it will be hard to get them out so make sure you choose correctly from the beginning. You should also run a credit check on them to make sure they do pay their bills on time. A credit score of at least 650 is ideal. And they should be paying their bills within 30 days, at an R1 level. An R2 level means they pay their bills within 60 days, R3 within in 90days. And if they pay people within 90 days what’s to stop them from paying you in the same fashion. You can also work with a real estate agent who can take care of all of these details for you. They will also post your rental on MLS. The fee for doing this is usually 1 month’s rent. Half a months rent will go to the person who found the tenant and half a month’s rent will go to the agent for posting and handling the listing. As a real estate investor, I believe that learning to find your own tenants is a good skill to acquire. If you are looking for some handholding on finding a tenant on your own, I’m happy to help. Once your new tenant moves in, don’t forget to treat them nicely. A welcome gift of something bubbly is always a nice touch and don’t forget them at Christmas time.
Blog
When is the best month to list your house?
I’m often asked when is the best time to list a house. The answer might be surprising. Many people feel that the spring market is the best time to list a home to get the most value. Well, I disagree. January is the absolute best time to list your house. Here’s why. The visits to realtor.ca increase significantly over the holidays and many people make a new year’s resolution to buy a new home or change their living situation (ie get a divorce). Then January hits and you have these buyers who are anxious to make a move with nothing to buy. Then the second week of January hits and they have this pent up desire to buy something – anything. During those first couple of weeks in January, there isn’t a lot of inventory to choose from. So when that first house comes on the market in January, all of those buyers pounce, create a larger bidding war then usual which thereby drives up the price. Over the years, I’ve noticed that the properties that come on the market during the last half of January fare the best, garner the most offers and therefore the highest price. By the time the spring market begins, there is so much more competition for the same amount of buyers so sellers don’t always fare as well as those who came on the market in January. So if you are in the market to sell and want the biggest bang for your buck, January is your month.
Blog
What do the new mortgage rules mean for you?
So the mortgage rules just changed for the amount of a downpayment required and many people are in support of making it more difficult for first time home buyers to get into the market. Many claim that coming up with an extra $5,000 or $10,000 downpayment isn’t such a hardship. Really!? I mean really!? Does the government realize it’s the holidays and many people have turned their attention toward spending time with their families and friends? Let’s face it, many people are spending more money doing their holiday shopping. So the government, in my opinion, has kicked first-time home buyers in the Toronto market in the gut over the holidays. Merry Christmas folks! You better reign in your holiday spending and forgo that winter vacation so that you can spend an additional $5,000, $10,000 or whatever the case maybe after Feb. 15th, 2016. The alternative is, stop buying presents for your friends & family and quick go buy a property before Feb. 15th, 2016. Those don’t sound like great options for first time buyers. And to exacerbate the situation there aren’t that many properties on the market during this time of the year so not only must they buy now, but they don’t have the widest selection. Then there are the people that were already putting 10% down that don’t feel this announcement affects them. Well it actually increases the competition in the marketplace, so they will be affected too. It will be interesting to see what the next 2 months of the Toronto real estate market will look like before this deadline sets in. Check out my interview with Pat Foran from CTV News on this subject here
Blog
When’s the best month to get a deal in real estate?
The holidays are here and it’s a time when our waistline expands and our wallets contract. It’s also the time when SOOO many people turn their attention to their holiday shopping that they miss out one of the best shopping opportunities out there. What’s that you may ask? Well real estate of course. There are currently OVER 400 PRICE REDUCTIONS in condos & houses on MLS right now. This means that there are a lot of people who would like to sell RIGHT NOW, before the end of the year. Guess what? The end of the year is fast approaching so it’s TIME TO MAKE A DEAL. One of my colleagues last week sold a house for $950,000 after 3 offers. I know that sounds high but if this house were on the market a month prior, it would have had at least 5 offers and sold for closer to $1.1 million. Now stay with me here, don’t get all doom and gloom about the real estate market and the high prices are coming to an end. The reason the buyer got such a deal (yes I know I just said that $950K was getting a deal) is because of the time of year. So if you’re looking for a deal, whether you’re looking to purchase a house or a condo, NOW is the time to MAKE A DEAL because the opportunity is out there RIGHT NOW. In January, everyone makes a resolution to purchase a property, then nothing comes out for a few weeks, then they all pounce on the same property driving the prices up further and making sellers extremely happy. Now if you want to follow the herd and spend more money than you need to? By all means, go for it. However if you’d like to MAKE A DEAL and buy smartly, there is a great opportunity waiting for you, RIGHT NOW. Buying a new home for the holidays? Now that’s a REAL present. Plus you’ll have time off from work to unpack and start the new year in fresh digs. Let me know what you’re looking for and I can help you find something.
Blog
What I’ve learned watching Million Dollar Listing
Can we say guilty pleasure? Yes I know I look at houses all day but I love watching Million Dollar Listing New York, Los Angeles and Miami. I find all of the characters extremely entertaining. And who doesn’t love to look at all of those million dollar properties with their incredible views and pools. I chuckle at how their deals are done and sped up for the sake of the viewers. I can’t even imagine presenting my clients with a verbal offer on their home. If it’s not on paper it hasn’t happened. I also think there is something that happens to a buyer and seller when they see the numbers of an offer on paper. It makes it more real and it forces them to truly think about the number in front of them. I’ve seen people say conceptually they wouldn’t pay or accept a certain amount but when they are staring at the numbers in black and white, it’s a different story. I also love the lavish broker’s open houses these characters throw. Their party budgets seems to be in the thousands of dollars. Really! Now really? Most agent open houses aren’t quite so lavish. The agents that go above and beyond in this city tend to have samosas, a cheese or veggie tray and water and maybe Prosecco if you really want to do something special. But there are no Burning Man costume parties and models walking around for an open house. Even for the opening of pre-construction condos, parties are not that lavish. As an aside, I recently attended a pre-construction condo opening where they served pizza out of a box and water. That’s certainly no way to treat a potential buyer. I would also like to see them include more woman as agents in all of these shows. And a little more diversity couldn’t hurt either. The casts tend be predominantly Caucasian men. It would be nice if they mixed things up a little and cast a woman. Although, we see Josh Altman’s fiancé, Heather, in action the odd time, it would be nice if they gave her the same exposure as the men so that we could see more women in the show. The odd thing is, I think there are actually more women than men as real estate agents in general so it should be reflected in the shows. All that being said, I do love watching all of the Million Dollar Listing franchises. I love the houses, the cars, the great clothes and the ridiculously over the top lifestyles that we get to be exposed to.